The Climate Report 2022, created by Tech Nation, has been published ahead of COP27, highlighting the advances made by tech companies fighting climate change. 

Key UK Metrics 

The UK was found to be only second to the US in terms of the number of climate tech firms and startups, with over 5,200 climate tech companies. 

Of the $111 billion USD raised by startups globally in 2021, four billion was raised by companies in the UK. 

Climate tech investment rose overall, due to two main factors: a ballooning investor appetite due to proven demand and market readiness, and an increase in public awareness, moving climate tech into the mainstream.

The UK currently has nine climate tech unicorns, including Octopus Energy, Britishvolt, Newcleo, Depop, ITM Power, Ceres, OVO Energy, Smart Metering Systems (SMS plc), and Vertical Aerospace. 

These account for just 7% of the total UK tech unicorns currently out there, but this number is likely to grow, according to the data. 

The report also looked at how effective each country’s action was. The UK is investing $17-19  per tonne of CO2 it emits. This is markedly behind Estonia’s investment of $79 per tonne and Swedens’ investment of $453 per tonne. The UK is, however, ahead of France, the US, and Germany. 

UK Climate Tech Startups Struggle 

Over 70% of startups and scale-ups identify partnerships and sales as major challenges in scaling and growth initiatives. 

For climate tech companies, these challenges heighten as there’s an inherent need to seek out environmentally-focused consumers who understand the benefits of sustainable work. 

Climate tech companies cited several different scaling up challenges, including expansion into Europe, hiring talented employees, setting up a business strategy, and raising Series A investment. 

Securing this level of funding is particularly more challenging for environment techs, within the traditional business environment, due to their higher risk, deep tech nature, and their focus on environmental impact over profit. 

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The nature of climate technology offers unique challenges to startups as well. This includes supply chain contractions, as they often rely on unusual materials to introduce innovative, sustainable technologies. Market interference is even more impactful, as losing access to materials can completely halt a business’s production. 

Decreasing funds for early-stage startups is impacting the growth of the climate tech sector globally. The UK in particular is struggling as its climate tech ecosystem is not as mature as its US and European counterparts. 

The report warns that the UK risks losing out on future major tech stars if they do not invest enough capital early on, especially in the climate tech sector. This would also make their climate ambitions even more difficult to meet. 

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